Tata Teleservices vs. UOI; [2016] 66 taxmann.com 157 (Guj)
The assessee was engaged in the business of providing telecommunication services and selling service products across the country. The assessee was served notices/summons u/s. 201(1)/(1A) in December, 2014 in connection with TDS proceedings concerning assessment years 2008-09 and 2009-10. The assessee contended that section 201(3) inserted vide Finance (No. 2) Act, 2009 with effect from 1-4-2010 provided period of limitation of two years from the end of financial year in which TDS statement is filed and four years from the end of financial year where the statement had not been filed. Since the assessee regularly filed TDS statements, period for passing order u/s. 201(3) for relevant assessment years expired on 31-3-2011/2012. Hence the assessee submitted that the notices issued in December, 2014 were time-barred. However, the Assessing Officer rejected the arguments of the assessee and held that the notices were valid and within the time-period relying upon the amended section 201(3) vide the Finance Act, 2014 which prescribed a common period of limitation i.e. seven years from the end of financial year in which payment was made.
The assessee filed a writ petition before the Gujarat High Court and contended that amendment to section 201(3) by Finance Act, 2014 was expressly made prospective with effect from 1-10-2014 and therefore the impugned notices/summons for financial years 2007-08 and 2008- 09 were erroneously issued by revenue. The assessee submitted that the proceedings had already become time barred in view of the provisions of section 201(3) prior to amendment in section 201(3) by the Finance Act 2014.
The Gujarat High Court allowed the writ petitions and held as under:
“i) It is required to be noted that in the instant cases, limitation for passing orders as per the provisions prevailing at the relevant time and even as provided u/s. 201(3)(i) as amended by Finance Act of 2012 had already expired on 31-3-2011 and 31-3-2012, respectively.
ii) Considering the fact that while amending section 201 by Finance Act, 2014, it has been specifically mentioned that the same shall be applicable with effect from 1-10- 2014 and even considering the fact that proceedings for financial years 2007-08 and 2008-09 had become time barred and/or for the aforesaid financial years, limitation u/s. 201(3)(i) had already expired on 31-3- 2011 and 31-3-2012, respectively, much prior to the amendment in section 201 as amended by Finance Act, 2014 and therefore, as such a right has been accrued in favour of the assessee.
iii) Considering the fact that wherever legislature wanted to give retrospective effect so specifically provided while amending section 201(3) (ii) as was amended by Finance Act, 2012 with retrospective effect from 1-4-2010, it is to be held that section 201(3), as amended by Finance Act No. 2 of 2014 shall not be applicable retrospectively and therefore, no order u/s. 201(1) can be passed for which limitation had already expired prior to amended section 201(3) as amended by the Finance Act No. 2 of 2014.
iv) Under the circumstances, the impugned notices/ summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted.”
